The EU's Common Agricultural Policy after 2020: high ambition, low reform!

Commentary

The European Commission believed that the CAP reform was potentially compatible with the EU Green Deal. As things turn out, in practice, it is not.

CAP reform

On Friday 23 October 2020, the European Parliament adopted its final positions on the various parts of the European Commission’s 2018 legislative proposal for the CAP reform post-2020, namely:

  1. Regulation establishing rules on CAP Strategic Plans
  2. Horizontal regulation establishing rules on financing, management and monitoring the CAP
  3. Regulation establishing rules on Common Market Organisation for agricultural products.

After two and a half years of negotiations on these three pieces of legislation, the EU Council also adopted its position on Wednesday 21 October 2020.

In the coming months, the EU Council and European Parliament will negotiate their own positions to reach an agreement in the trilogues, unless the European Commission withdraws its initial proposal.

In the background, the trilogues on CAP will continue in parallel with the negotiations on the Multi-Financial Framework 2021 – 2027 and in the middle of a second wave of the COVID-19 pandemic. To some extent, these factors can still influence the directions of the CAP reform and its rural development pillar. 

After the agreement on the CAP reform package at EU level, the 27 Member States will complete the design of the national CAP Strategic Plans and submit them for the approval of the European Commission. The timeline is still subject to change, but most likely, the 27 CAP Strategic Plans will enter into force as of January 2023. Until then, the CAP and its rural development policy will continue as business as usual.

Can we expect any changes in the new CAP?

Considering the ecological damage and social inequalities of the European agri-food system and rural areas, the European Commission outlined a proposal for the CAP reform post 2020 introducing mainly:

  • A fairer distribution of payments to farmers: currently, 80% of direct payments are concentrated only in the hands of 20% of European farmers.
  • Higher green ambition: strengthening the agri-environmental and animal welfare conditionalities for receiving direct payments and introducing eco-schemes, which are new forms of annual payments rewarding farmers for their good environmental practices (e.g. agro-ecology, organic farming, integrated pest management).
  • A new delivery model: based on more flexibility given to the Member States and a stronger policy orientation towards performances, rather than compliance.

The European Parliament and the EU Council have systematically watered down the European Commission proposal, and the positions adopted in October show that the initial ambition is fading fast. Here some highlights:

  • Any reform on the distribution of payments might be excluded: i.e. by removing any mandatory capping to payments or still leaving payments based on land and title ownership, rather than on social and environmental criteria.
  • The green ambition will strongly decrease: by diluting "environmental spending" with interventions which do not prove to contribute positively to the environment; by excluding 40% of agricultural land subject to make space for nature; by excluding or postponing the mandatory support to ‘eco-schemes’.
  • Performance mechanisms are going be undermined: e.g. by excluding performance bonus, postponing the performance assessments, trying to reduce the number of target indicators subject to performance review, excluding impact indicators in the performance reviews.

The European Commission believed that the CAP reform was potentially compatible with the EU Green Deal. As things turn out, in practice, it is not! Furthermore, the way of working and the functioning of our democracy is also a big concern at EU and national level. For example, the big three centrist political groups in the Parliament came together with an agreed position, one which excluded the other political groups and maintained business-as-usual in large part. And this in large part became the Parliament’s plenary position.

In the coming months, the three EU co-legislators will negotiate to find an agreement at EU level. The European Commission can suggest amendments or withdraw the CAP. If however the European Commission surrenders and the EU Council and Parliament insist to approve a "laissez-faire" CAP which is incompatible with the EU Green Deal, there is little hope to expect higher ambition and all attention moves to what will be difficult CAP Strategic Plans negotiations at national level.

However even then, the European Commission has the power to engage with the national capitals on how compatible their CAP strategic Plan is with the EU Green Deal. Just how much it will compel alignment remains to be seen.

For more information, visit ARC2020’s CAP section and ARC2020’s CAP Strategic Plans section here and on this website.